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Analysis

Trump Issues Executive Order on Healthcare Price Transparency

By Steven Porter  
   June 24, 2019

Officials say the move will result in lower healthcare costs by unleashing competition. Some industry stakeholders are disputing that claim.

President Donald Trump issued a highly anticipated executive order Monday, directing federal agencies to push for greater price transparency among healthcare providers and insurers.

In his typical hyperbolic style, Trump described the order's impact as "the opposite of Obamacare" and said some people say it's even "bigger than healthcare itself."

"With this order, hospitals will be required to publish prices that reflect what people actually pay for services in a way that's clear, straightforward, and accessible for all," Trump said.

"Prices will come down by numbers that you don't even believe," he added.

As has been the case with some of his past healthcare-related announcements, Trump's order is light on details and directs Health and Human Services to fill in the gaps with a more fully fleshed policy and a potentially long rulemaking process.

A fact sheet from the White House says the following items are included in the order:

  • HHS "will require hospitals to publicly disclose amounts that reflect what people actually pay for services in an easy-to-read format";
     
  • HHS "will begin the process of making information on out-of-pocket spending more readily available to patients before they receive care";
     
  • "Researchers, innovators, and providers will get more access to data that will help them develop tools to provide patients with more information about healthcare prices and quality";
     
  • The administration "will improve quality measurements and make them public"; and
     
  • The order expands benefits for tax-preferred health accounts.

During the signing ceremony, Trump yielded the podium briefly to R. Lawrence Van Horn, PhD, MBA, MPH, an associate professor management in economics and the executive director of health affairs at Vanderbilt University, who said the executive order's freemarket approach will reduce costs and benefit the economy overall.

"Lower prices for healthcare leaves more money in Americans' wallets and paychecks for the purchase of all other goods and services that are important for their lives," he said.

Not everyone agrees with that assessment. To the contrary, America's Health Insurance Plans (AHIP) President and CEO Matt Eyles said in a statement that requiring the public disclosure of negotiated rates "will reduce competition and push prices higher" for consumers and taxpayers alike.

"Competition experts, including the bipartisan Federal Trade Commission, agree that disclosing privately negotiated rates will reduce incentives to offer lower rates, creating a floor—not a ceiling—for the prices that hospitals would be willing to accept," Eyles said in the statement released Monday before Trump's announcement.

Rather than supporting the shift to value-based care, compelling the disclosure of negoatiated rates "perpetuates the old days of the American health care system paying for volume over value," Eyles added.

HHS Secretary Alex Azar and Centers for Medicare & Medicaid Services Administrator Seema Verma joined Trump for the signing ceremony and each released statements praising the executive order.

"The President's action today represents one of the major steps in the long history of American healthcare reform, and one of the most significant steps ever taken to put American patients in control of their care," Azar said. "For decades, America's healthcare system has kept price and quality information secret from the patients who need it. Healthcare experts all across the political spectrum have long agreed this has to change."

"The President has promised American patients the affordability they need, the options and control they want, and the quality they deserve, and that's what today's action helps deliver," he added.

Verma said the announcement shows Trump's commitment to ensuring that Americans can know both price and quality information about their healthcare.

"Since day one, this Administration has made great strides in increasing transparency to foster competition in our healthcare system to keep care affordable, and empowering patients to make informed healthcare decisions," she said. "I am excited to implement these bold reforms to transform our healthcare system into one that delivers affordable and accessible healthcare, and puts American patients first."

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Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.

Photo credit: Washington, D.C., January 4 2019: President Donald Trump, speaks to the media in the Rose Garden at the White House after meeting with Democrats to discuss the partial government shutdown. (Michael Candelori / Shutterstock.com)


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